| Adam,
for someone to have access in this way, i'm afraid one of you in the house will have needed to 'give' them access. This is either by opening a file or running an executabble that is then TSR (Terminate and stay resident).
There are lots of websites with information on this. Cult of the dead cow, Back Orifice etc etc....
Basically when you click it runs up an app which then gives the hacker an IP addy and can then access your sessions... Although it's not a 'live' envronment so they can't see what you can see, just have access to files/folders etc... | 
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